The only constant is change Asif

OPINION

Asif Saad

The only constant marketing skills of any kind, a simplistic price increase or reduction will most likely mean leaving margin on the table. Understanding is change the customer in deeper ways not only allows the business to price intelligently but also helps foster new bonds. Procurement and supply chain functions are the other major The old adage, “the only constant is change” is truer today than perhaps ever before. Businesses are grappling with inflation, economic instability, political volatility, natural disasters – all thrown together with a global recession unlike anything we have seen in the near past. Not the times for the faint hearted contributors to business profitability. They play a critical role in enhancing resilience by serving as a bridge between the business and its suppliers. As in the case of marketing, too many supply chain functions apply simplistic models in their relationships with the outside world. Buying or not buying cannot be a function of price for sure. However, in these gloomy days and amidst all these new challenges, alone since a broader set of levers are required to create real value. the resilience required in finding new ways of doing things has taken on a Supply chain managers and leaders ought to consider the following; new meaning. Identifying and implementing different approaches to protect n Is Supply chain a CEO priority? market shares and margins must be at the top of local business agendas. n Have we considered areas such as service levels, inventory, Two functions which have a direct bearing on business outcomes are product quality and flexibility? In addition to price? marketing and supply chains and it is these areas, in particular, which need n Are there ways to benchmark buying KPIs with like-to-like to rise to the occasion. Our business leaders can panic when unable to main- industry/competitors? tain sales at a profitable price and live in the fear of margins being wiped out. n Can we improve demand/supply forecasting, which has a What follows in this piece is how leaders need to guide these functions and fundamental relationship with supply chain efficiency? make them work together seamlessly. Finally, with the best of marketing and supply chain ca-

Let’s start with marketing, which for this piece includes sales and any pabilities, the elephant in the room is bringing it all together and other activities related to the customer. Many companies are unable to hold creating functional collaboration like it was never before. There is sales volumes required for sustainable operations, especially in the current no better way to fight external uncertainties than forging a team environment. The simplest reaction from the marketing team is to drop which backs each other. Of particular importance is the leadership’s prices to maintain sales while the leadership would like to maintain margins role in creating cross-functional collaboration. Breaking down silos as well as volumes in passing on the cost increases. This dialogue eventually and improving visibility across functions is how the organisation settles at one end or the other but without deeper analysis one is likely to gains true resilience. Failing to coordinate across functions can be lose in either direction. Customers can react differently to price increases, expensive. A manufacturing supply chain head of a large domestic depending on how price sensitive they are. But the challenge is to move company thought he was doing a great job when he procured an customer interaction beyond price. Marketing teams need to consider the essential raw material in advance looking at the impending price following; increase. Unfortunately, this was never tied up with the marketing n Do we understand customer pain points besides price? If so, can we lever- manager who was losing customers for products based on that parage some of these – payment terms, delivery dates, logistics cost etc. ticular material due to an environmental issue. The business ended n Is there room to improve / change service levels? up with a massive inventory of a material which could not be used, n Can we segment the market so that prices on all products are not in- together with a bleeding balance sheet! This is a typical end result creased or dropped in one broad brush? of an organisation working in silos. Other instances may not be so n Can the product be reengineered? Are there opportunities to save on drastic but deeper analysis will reveal either money lost directly or materials, production processes, labour? in terms of opportunity cost.

Unless you are in a commodity business, which really does not require To avoid such mistakes, organisations should build collaboration platforms which enable rapid decisions and execution. The usual monthly business meetings cannot be enough to act in a fast-changing situation. Some sort of steering committees where decisions can be taken promptly may be the best way to go. The writer is a strategy Businesses need to harness information technology as a core enabler across many functions with the marketconsultant who has ing and supply chain being at the front end of using data and analytics. This will require new talent and capabilpreviously worked at ities together with significant changes in mindsets. Many of our businesses are unfortunately still operating in various C-level positions traditional information technology mindsets and even struggling with basic ERP implementations. It is, therefore, for national and multi- going to be a long journey to using sophisticated analytics, but they need to get started with a sense of urgency. national The opportunities in a crisis-like situation which we have today must stem from improvements in the corporations quality of management thinking, planning and execution. The lessons learned from across the globe need to be understood and applied in Pakistan to not just survive but also prosper. This is not the first or the last time we will see an uncertain landscape. Management teams cannot stay in the past and those which do, will pay a big price. n